Reports indicate that no fewer than 16 companies have withdrawn their operations from the Onne Free Trade Zone. This development may not be unconnected to allegations that the Oil and Gas Free Zones Authority (OGFZA) has been damaging the concept of free trade zones in the country.
Speaking on the development, Dr. Austin Obieze , a Port Harcourt based oil and gas industry expert, linked the exit of the 16 companies to what he described as “rogue behaviour” towards free zone operators in the country.Obieze was of the opinion that the recent attack by OGFZA against a leading free trade zone operator, Intels Nigeria Limited (INL), sent the wrong signals and created panic among businesses operating in the zones.
“It was a very bad move by OGFZA, which was set up to promote trade and attract investors into the country through the oil and gas free zones concept. OGFZA, under Umana Okon Umana are doing the direct opposite of what it was established to do,” Obieze said. He said by OGFZA’s action against Intels, free trade zones operation in Nigeria “cannot be the same again” as investors will find it difficult to take government for its words.
He said: “Free trade zones all over the world are created to serve as destination for capital; attract investment, create jobs and aid the transfer of technology to the host country. Free trade zones played a key role in the boom enjoyed by the Asian Tigers.
“The Nigeria Export Processing Zones Authority (NEPZA) and the Oil and Gas Free Zones Authority (OGFZA) were specifically set up by the Federal Government to encourage investments in Nigeria in line with the country’s economic growth aspirations. Several incentives were instituted including 100% repatriation of capital investment, remittance of profits and dividends with no import or export licenses required. Companies operating in the free zones also enjoy immigration non-quota regime and are exempt from taxes such as value added tax, corporate tax, withholding tax, capital gains tax and customs duty on export of goods to other countries."
“It was these incentives that attracted several companies resulting in over five trillion naira investments in the zones, with several thousands of jobs created. Among the 16 companies that have decided to exit the free zone are Prodeco International Limited, West Africa Machinery Services (WAMS), MGM Logistics Solutions Limited and Orlean Invest Limited.
Also speaking on OGFZA’s battle against Intels, The Managing Director/CEO of Samsung Heavy Industries in Nigeria, Mr. Frank Ejizu, said: “You cannot be wooing investors on one hand and scaring them away on the other hand. It will not work. If there was a violation of the law, then there is a ground for sanction.”
The General Manager, Finance of the Lagos Channel Management Company Limited, Mr. Joseph Amoni, said the action of the government would scare foreign investors away from the country.
Also, the Chairman, House of Representatives Committee on Maritime Safety, Education and Administration, Mohammed Umar Bago, described the situation as “getting sour”.
